Knowledge Management Among Business Organisations Commerce Essay

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"In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge" Nonaka(1995). Knowledge management (KM) is a field that is gaining recognition among business organisations and Scholars. While some are paying particular attention to KM as the primary resource within their organisations others are embracing its concept and integrating t to their existing business strategies to maintain a competitive edge among competitors. Zanjani (2008).Today's uncertain business environment has made Managers and Executives see the need to introduce KM into their business strategy, as it is considered a prerequisite for efficient productivity, Martensson (2000). Knowledge resides in various places in an organisation ranging from databases, filing cabinets, to people's head. To make such knowledge useful, it has to be collected and made available to the right recipients.

To achieve success in an increasing competitive business environment, quality knowledge is deemed the most valuable tool to be applied to any key business process. This has been the case of "Gragra plc" which deals in the design and development of antivirus softwares.They have identified the benefits associated with KM, thereby adopting the concept of KM in order to retain valuable knowledge within the organisation, as well as making it available to their employees. Their KM system is designed to store knowledge such as employee knowledge (tacit knowledge), costumer requirements and specifications, new technology, and past and present market trends. This was instigated by the fact that the rate of innovation is rising along with high expectations from customers, trends of employees retiring early thereby causing loss off knowledge and the fact that having an efficient KM system would maximise their profit margin.

This report intends to define the concept of KM and distinguish it from Information Management (IM) and other information practices. The key controversies concerning knowledge Sharing (KS) would be discussed as well as key benefits and some possible difficulties in implementing a KM program. Proper Understanding of the concept of KM in an organisation would be the key step to maximising its purpose.KM has been implemented in several organisations but have failed to support the productivity of such organisation, as senior management have often been blamed for such failure. (Ashley Braganz,2002). A successful implementation would involve the effort of the entire workforce in an organisation.

Definition of knowledge management

Knowledge management is a field that has been studied for a long time, thereby giving it several definitions from different school of thoughts.Gupta et al(2000) defines "KM as a process that helps organisations find, select, organise, disseminate, and transfer important information and expertise necessary for activities. From this definition, it can be noted that it assists organisations in identifying and structuring valuable information that they can use to their benefit. A more elaborate definition by Ouintas et al. (1997) states that "the purpose of KM is to discover, develop, utilize, deliver, and absorb knowledge inside and outside the organization through an appropriate management process to meet current and future needs".

From analysing both definitions above, it can be concluded that true essence of KM, is to identify, acquire, store and equip people with the right information in an organisation for future productivity.KM Instigates the culture of knowledge sharing among colleagues in an organisation allowing the flow of valuable knowledge.KM identifies knowledge needs of employees, create new knowledge and make it available for sharing and use. See fig. 1. It also recognises people's tacit knowledge as an asset, and devises means of storing this knowledge as they are deemed valuable.

KM presents Individuals with an attitude of a 'single-minded commitment to improvement' that would enable them increase their organisations productivity. Although computer systems are used to store tacit knowledge, they are not required in KM. They serve as an enabler of KM practices

KM can be seen as knowledge regarding to organisations resources such as products, markets, technologies and organisations and how to manage this resources, including managing the process that act upon this resources which are their development, conservation, use and sharing .However KM involves identifying this resources, analysing and making them available to be used for fulfilling strategic organisational objectives.

A Knowledge Paradigm

Fig. 1, Illustrates the process of KM in an organisation. How knowledge needs are identified and created, leading to how they are used. Bouthillier  and Shearer (2002)

Differences between Information Management and Knowledge Management

As there has been confusion caused by scholars and media on the difference between information management and knowledge management, an effort is made in this report starting with the difference between information and knowledge.

Data which is the foundation of information and are referred to as text with no meaning and a set of un-correlating facts.Nonaka and Takeuchi (1995), defines information as "a flow of meaningful messages". Information consist of facts and data's in context. Information which is considered to be objective constitute of oral,written,and graphical expressions as well as 'body language which a person can assimilate ,understand and incorporate into their knowledge structure hence broadening their knowledge base. Information is transferred through electronic and hard format, including social networks.

While knowledge is viewed as "the mental processes of comprehension". (Terra and Angeloni) defines Knowledge as "Experiences, values, insights, and contextual information". It is what the mind of a person learns and understands what they know. Knowledge is considered subjective and used to receive information, assess, adapt and implement it . Knowledge is created through the combination of information, context and experience. It is a fluid mix of collected experiences, values, contextual information. (Zile and Vinogradova, 2005). However, information is informative in nature while knowledge provides understanding that is achieved by interpreting information. Information can be added to knowledge to increase what a person knows. See fig. 1.

A Knowledge Pyramid

Fig. 1. A Knowledge Pyramid Illustrating the order which Knowledge is built on Information and data and how knowledge is formed, indicating their differences and heirachy.(Bouthillier and Shearer, 2002)

Information management deals with the storage, organising and making available of both internal and external information of an organisation while knowledge management deals with strategies implemented in organisations to identify and adopt insights and experiences of people that can be used towards the benefit of the organisation. The following are how IM an KM contrast each other from different perspectives:

A, From a Managerial view

'Terra and Dra' argues that from management perspective, the major difference between IM and KM is that information can easily be identified, organised and distributed while knowledge cannot be managed due to the fact that it resides in a persons mind. He further explained that as knowledge cannot be managed, it is only possible to affect the knowledge creation process through managerial acts. KM involves supporting the human perspective of work and ensuring it is well integrated into the values of the organisation. IM on the other hand is concerned with physical aspects of sharing ideas such as; Papers, journals, mails (e-mails) which does not involve actual innovation and knowledge creation processes. 'Terra and Dra'.

B, From a Project View

'Terra and Dra' states that 'KM projects' should encompass different areas in an organisation un-like IM projects which may focus on one aspect for example technology. KM is constantly associated with the process of "managing" than IM because KM identifies people's skills (know-how), experience and,motivation.The success of IM projects are assessed based on technical accomplishment while KM involves more on behavioural changes and action as well as how the cultural change of KS is being accepted by people .Another difference is IM projects rely on associating results or (Return on Investment,ROI) that may be intangible while KM relies more on individuals, willing to share, and use their own tacit knowledge to the organisations advantage there by making the success of the project dependent on individuals. Management can instigate quickly the Information base of an organisation but it takes more time for this to be achieved with knowledge. 'Terra and Dra'.

C, Preserving Intellectual asset: IM and KM's View

In this case, Knowledge is viewed as an intellectual asset; there are significant differences between IM and KM pertaining to Preserving this intellectual asset. An IM's view would lead organisations to place emphasis on physical security, permission and high access level. 'Terra and Dra' suggest that while this may be important, the knowledge which individuals posses is more important and should be used to implement a systematic protection strategy.However, knowledge is considered an asset or resource unlike information and the only way of preserving knowledge is by "retention policies and circulation of knowledge". Circulation would help share knowledge in an organisation and retain it in case an individual resigns from that organisation. KM focuses more on individuals, how they use their existing skill and share it effectively while IM can easily integrate Information technology tools together to achieve their purpose.

Controversies in Knowledge Sharing

Knowledge sharing (KS) has become an important practice among industries and organisations. The exchange of knowledge is done with the intention of achieving competitive advantage since new knowledge would be acquired from different sectors .KS is described as the giving and receiving of information framed within a context by the knowledge of the source. Sharratt and Usoro ( 2003).

It has been argued that information-sharing (IS) is the same as knowledge sharing. (Sharratt and Usoro (2003) states that IS encompasses a wide spectrum of exchanges (ideas,facts,information) and does not encourage the creation of new knowledge .However KS basically entails the generation of new knowledge in the recipient, while information is the transfer of existing facts and data to the recipient.

Another argument about KS is some Scholars disagree with the idea of knowledge management being directed towards the notion that tacit knowledge can be formalised and stored in computers (converted to explicit knowledge) for sharing purposes. Their argument consist of the fact that knowledge is more tacit in nature (resides in one's mind) and can only be shared through conversations. While it is widely agreed that explicit knowledge (Codified) can easily be shared, tacit knowledge must undergo some processes before it can be shared. (Fernie et al ) says appropriating tacit knowledge may be absolutely inappropriate for improving competitiveness of an organisation. Alavi (1999) refferes to tacit knowledge as the "currency of the informal economy of the workplace". As it is knowledge gained through personal experiences, management interferences would devalue the currency from its original state there by limiting its use. It is easy to say tacit knowledge is considered the most important, it is also difficult to determine the mode of sharing and if eventually tacit knowledge is shared, is it the original knowledge that is being shared?

As Nonaka and Takueuchi's (1995) theory supports the notion that tacit knowledge can be converted to explicit and utilised for commercial purposes by organisations, the question of "how this dis-stabilises the individual's exchange value in the organisation" arises. Who owns and controls the tacit knowledge becomes an ethical issue since it (tacit knowledge) is inherent in individuals.

Another major controversy is the argument that explicit knowledge stored in Information Technologies can be solely relied upon without any formal knowledge from the knowledge seeker. Boersma and Kingma (2006) argues that intranets can enhance knowledge sharing among employees and the knowledge available on the intranet is explicit knowledge that can be shared. The issue is people's tacit knowledge is never fully shared, unless the explicit knowledge (data) on the intranet is connected to the tacit know-how, then can the intranet be use full to the user. This can create a kind of consensual knowledge. This indicates that the user must possess the skills to select the suitable explicit knowledge.However, this concludes that the knowledge is not located in the computer, but in the human user. The end-user gives meaning to the data and information on the intranet by means of their tacit knowledge. Boersma and Kingma (2006)

Benefits of Knowledge Management

The benefits of KM in an organisation cannot be over emphasised. Alavi (1999) states that people value KM for the sake of achieving organisational goals and not for gaining knowledge itself. Furthermore, knowledge has the potential of making a difference in any way which can contribute valuable benefits to the organisation. (Alavi 1999).

From a general point of view, the benefit of KM can be seen as helping to ensure that the right information gets to the right people at the right time to make the right decision. Which in turn would benefit the organisation.KM enables growth in organisational capabilities, whereby stored knowledge can be used to improve on existing performances, operations, products and services. It also enhances faster innovation, better customer service, reduce knowledge loss and efficient cost saving. By adopting a KM initiative, 'Hoffman La Roche' (a pharmaceutical company) improved their productivity and performance. It was able to reduce cost and the time it takes for regulatory approval of new drugs .

1, Creation of new Knowledge.

Another benefit of KM is knowledge creation through teamwork. This allows for creation of new knowledge and storing them for future use which would save time and valuable effort. British Petroleum (BP) introduced video-conferencing to enable virtual team working among employees This encouraged the sharing of knowledge and creating new ideas which has significantly increased the rate at which solutions to critical operational problems are realised (Skyrme 2003). Fig.2, illustrates a knowledge cycle among team workers,how new knowledge is created, codified and shared among team members for faster solutions and future use.

Fig. 2, illustrates a how New knowledge is created,captured and codified through team work.

2, Enhanced Performance and Productivity.

A KM initiative can solve by solve emerging organisational problems. It can provide vital information and knowledge to "knowledge workers" efficiently and productively so as to minimise cost and time while Improving the quality of performance. (Egbu et al. 2005)

3, Indicating Knowledge Flow.

KM offers a map of knowledge flow within and across the organisation. It also pinpoints both the best practices and barriers to knowledge-sharing. (Egbu et al. 2005)

4, Sharing Knowledge with Customers.

Knowledge Sharing would help new customers better understand an organisation's overall way of operation. It also, provides the client-supplier with an opportunity to share ideas, intelligence and materials and encourages innovation. (Egbu et al. 2005)

To better understand the different kinds of benefits as they are numerous; they are categorised into three different classes, (Knowledge, Intermediate and Organisational Benefits).this is illustrated in fig 1 under a benefit tree which shows the interdependencies between the different kinds of Benefits.

A typical KM benefit tree

Fig. 2, illustrates the various kinds of benefits that can be derived from a KM initiative. The arrows point to benefits that lead to higher level benefits. The benefits positioned on the left are those that are more visible or quantifiable while those to the right are as a result of various factors. (Skyrme 2003).

Difficulties in Implementing a Knowledge Management Program

As KM has been considered an important strategy tool for any organisation willing to be highly productive, achieving desired goals and benefits from KM depends on how it is being implemented, utilised and understood by those involved in the process.

1, Management Involvement.

Commitment is an important factor in implementing a KM program and this implies to everyone involved in the organisation starting from top management to low level employees. Top management involvement is deemed very important because once this is recognised; employees would consider it as an incontrovertible management initiative and fully render their co-operation. This seems to be a major problem in KM programs, because top management consider KM to be another "fad" (Alavi 1999). They have doubts about KM's Capabilities, which is caused by their lack of knowledge about KM and its abilities. If top-management resist to participate and do not show a unified front, and support towards the program; the KM program is likely to be a failure.

2, Sharing Culture

These posses a great concern during KM initiatives because of the difficulty and implication involved in convincing people to volunteer and contribute their knowledge. Most people hold the credence that "knowledge is power" thereby sharing what they know with other people reduces their superiority. For example, cases of competition for promotion among employees (Wiig 1999). It is always difficult to introduce such sharing culture especially activities like Debriefing which makes people feel they are robbed of their personal knowledge. Some organisations fail to explain the benefits and importance of KM program to their employees. Not having full knowledge of the importance of KM would restrict their ability to adapt to a new sharing culture. However, policies guiding KM should be well stated to encourage full participation, else the program would be perceived as a hoax .Apart from individuals, Departments in business organisations find it hard to share knowledge with other departments especially when each department is responsible for generating and showing profit.

Case study on Implementation issues

After a study on medium sized organisations in Malaysia,( Daniel Chandran1 and Kavitha Raman) Discovered the following as implementation problems of KM which respondents considered the awareness of such problems to be above 50% .

1, Difficulties in accessing relevant knowledge encountered by Employees owing to the Lack of skills of using various tools and not being too technologically savvy.

2,The introvert culture of the organizations impedes their ability to acquire external knowledge.

3, The organizations lack Knowledge officers who possess the ability to endorse proper KM agendas.

4, They lack KM experts who have the skills to pinpoint key knowledge sources within the organization.

The foregoing list comprises of Problems that can potentially be encountered during implementation of a KM program in any organisation regardless of the location or size.